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How do I Choose the Best Green Energy Investment?

Jacob Queen
Jacob Queen

Choosing the best green energy investment will generally involve some research into the various stocks and other investment options available. Energy is a constantly changing sector, and as new technology is developed, the choices available will probably continue to change. For those who invest in green purely for financial reasons, it is probably best to focus on green energy investments that are most likely to succeed in the future. Those who are more concerned with the environmental morality of green energy investment would be advised to focus on the energy sources that have the fewest negative effects on the planet. Popular green energy investments include bio-fuels and wind, solar, and nuclear power.

Determining which green energy investment option has the best financial potential is often difficult, partly because the various options are viable for different reasons, and partly because the technology keeps evolving. At one point in time, it may seem like solar has the most potential to succeed, and then a new technology may be developed, which makes wind seem more viable. Most experts recommend that investors go with the option that seems more viable at a given time. Other experts suggest a more evenhanded approach, spreading the risk across several sectors at once, so that if one energy type fails, the repercussions will be lessened.

Wind power is a clean energy source.
Wind power is a clean energy source.

Choosing which green investment options are most environmentally sound is often more complex than it may seem on the surface. Some types of green energy have significant downsides, and they often have the potential to produce a noticeably negative effect on the environment. For example, many bio-fuels can require significant amounts of traditional fuel to create, and forests may be destroyed to make room for crops. Other examples would include wind power, which can kill many birds, or nuclear power, which can lead to environmental disasters if it’s mishandled.

Solar panels are one popular green energy investment.
Solar panels are one popular green energy investment.

There are several ways of approaching green energy investment, and each has different advantages. People with significant initial capital to invest may choose direct investment into green stocks, but this option can require more research and general expertise. Green mutual funds allow people to invest smaller amounts of money and have it spread across several stocks at once by investment experts. Green exchange-traded funds (ETF’s) are considered quite similar to mutual funds, but they have less expert micromanagement, and the fees for trading are lower. The best option to choose will depend on the individual investor’s skills and initial capital.

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    • Wind power is a clean energy source.
      By: sanderstock
      Wind power is a clean energy source.
    • Solar panels are one popular green energy investment.
      By: anyaivanova
      Solar panels are one popular green energy investment.